How does an organizations culture affect innovation?

Innovative organizations tend to have similar cultures. They encourage experimentation. They reward both successes and failures. They celebrate mistakes. For example, at the General Motors APEX unit, employers are encouraged to experiment and rewarded for experimenting with new products in the marketplace. An innovative culture is likely to have the following seven characteristics:

1) Acceptance of ambiguity: Too much emphasis on objectivity and specificity constraints creativity.
2) Tolerance of the impractical: Individuals who offer impractical, even foolish answers to what if questions are not stifled. What seems impractical at first might lead to innovation solutions.
3) Low external controls: Rules, regulations, policies, and similar controls are kept to a minimum.
4) Tolerance of risk: Employees are encouraged to experiment without fear of consequences should they fail. Mistakes are treated as learning opportunities.
5) Tolerance of conflict: diversity of opinions is encouraged. Harmony and agreement individuals or units are not assumed to be evidence of high performance.
6) Focus on ends rather than on means: Goals are made clear, and individuals are encouraged to consider alternative routes toward their attainment. Focusing on ends suggests that several right answers might be available for any given problem.
7) Open systems focus: The organization closely monitors the environments and responds rapidly to changes as they occur.

What human resources variables affect innovation?

Within the human resources category, we find that innovative organizations actively promote the training and development of their members so that their knowledge remains current. They offer their employees high job security to reduce the fear of getting fired for making mistakes, and encourage individuals to become champions of change. Once a new idea is developed, champions of change actively and enthusiastically promote the idea, build support, over come resistance and ensure that the innovation is implemented. Research finds that champions have common personality characteristics: extremely high self confidence, persistence, energy and a tendency to take risks. Champions also displays characteristics associated with dynamic leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong personal conviction about their mission. They are also good at gaining the commitment of other to support their mission. In addition, champions have jobs that provide considerable decision making discretion. This autonomy helps them introduce and implement innovations.

Why do Entrepreneurs Value Innovations?

In today’s dynamic world of global competition organizations must continually innovate new products and services if they want to compete successfully. We know that innovation is a key characteristic of entrepreneurial ventures. In fact, you might say that innovation is what makes the entrepreneurial venture entrepreneurial.

What must an entrepreneur do to encourage innovation in the venture? Having an innovation supportive culture is crucial. What does such a culture look like? It’s one in which employees perceive that supervisory support and organizational reward systems are consistent with a commitment to innovation. It’s also in this type of culture that employees not perceive that their workload pressures are excessive or unreasonable, and research has shown that firms with cultures supportive of innovation tend to be smaller; they have fewer formalized human resources practices and less abundant resources.

Although having an innovation supportive culture is important, employees also need to be able to do something with those innovations. For example, at the India Engineering Center, Sun Micro System India, the mentoring modules in the Sun Engineering Enrichment and Development (SEED) program are designed to create a culture of innovation in the organization, as well as help employees to advance their careers and increase their job satisfaction.

Procter and Gamble’s Crest Spin brush was developed at the P&G Beijing Technology Center. Innovation at P&G begins with the commitment of top management with CEO Alan Lafley stating that innovation is our lifeblood. P&G fosters innovation by employing more than 7,500 scientists at 22 research centers in 12 countries and investing 4 percent of sales in R&D. R&D rewards employees for their contribution through financial compensation, promotion, and the freedom to influence project selection. Training program teaches employees how to manage the innovation process and worldwide electronic communications systems allows them to share knowledge.
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